Executive Summary
Health Care Leader Action Guide: Understanding and Managing Variation builds upon the report of the
American Hospital Association’s Task Force on Variation in Health Care Spending (January 2011). The
purpose of this guide is to provide hospitals with a resource to help reduce inappropriate variation
within their own organizations and in conjunction with care partners. The guide includes practical steps
to understanding and managing variation and a list of best practices and case studies as examples and
resources for hospital leaders to use for implementing key interventions.
Variation arises from many interrelated factors, some within and some beyond the control of the health
care system. Not all variation is undesirable or inappropriate. Distinguishing among the types of
variation to determine what is acceptable and what is not is critical to arriving at a reasonable set of
recommendations for action. Hospitals and health systems can take these action steps alone or in
collaboration with others to reduce inappropriate variation within their organizations.
There are six steps to understanding and managing variation:
1. Determine your strategic focus to reducing variation
2. Set measurable goals
3. Acquire and analyze data
4. Understand your data
5. Identify areas of focus
6. Implement improvements
Research has shown that some of the greatest potential areas of focus include:
• Intensity of hospital services
• End-of-life care
• Outpatient/ambulatory services
• Obstetrics
• Imaging use
• Emergency services
To address these focus areas, there are a variety of improvements to implement, including:
1. Providing feedback of performance data at the provider level
2. Standardizing processes of care by using checklists and other clinical and operational protocols
3. Implementing evidence-based guidelines and pathways
4. Utilizing evidence-based appropriateness criteria
5. Using quality improvement interventions, such as Lean, Toyota Production System, Six Sigma,
Plan-Do-Study-Act
6. Initiating culture change toward safety, improvement, transparency, and excellence
By approaching the management and reduction of variation through a systematic improvement process
in focused areas, inappropriate variation can be reduced to improve overall outcomes.
